Fitch Ratings has upgraded the rating on approximately $54 million of outstanding airport revenue bonds issued by the Rhode Island Commerce Corporation on behalf of the Rhode Island Airport Corporation (RIAC) from ‘A-’ to ‘A,’ with a rating outlook of “stable.” The full Fitch Ratings report can be viewed here.
In announcing the upgrade, Fitch Ratings cited several positive factors, including Rhode Island T. F. Green International Airport’s (PVD) robust financial position, highlighted by reduced leverage, strong coverage levels, and strong cash balances. The agency also noted that passenger levels have increased, with new airline services underway to boost enplanement growth and volumes. More information about RIAC’s credit ratings upgrade can be found at FlyRI.com.
“We are thankful for Fitch Ratings’ continued confirmation of our strong financial stability and growth,” said Iftikhar Ahmad, President and CEO of the Rhode Island Airport Corporation. “RIAC’s ‘A’ credit rating truly reflects the commitment of all who have worked so hard to help us become one of the best airports in the world and help boost our state’s aviation-related economy.”
“It is heartening to know that respected credit agencies continue to affirm the wisdom of RIAC’s efforts to strengthen our airport’s long-term financial standing and build solid relations with aviation stakeholders,” said Jonathan Savage, Chair of RIAC’s Board of Directors. “This positive news reflects the coordinated efforts of federal and state leaders to support our airport and grow our state’s economy.”
The recent credit upgrade marks the fourth time RIAC has received a revenue bond upgrade in two years. In December 2023, Fitch Ratings upgraded RIAC’s bond rating to ‘A-’ from ‘BBB+.’ Earlier in 2023, S&P Global upgraded RIAC’s long-term and special facility bond ratings to ‘A.’ Key strengths cited by S&P at the time included RIAC’s:
• Very strong management and governance
• Very strong liquidity and financial flexibility
• Very strong debt and liability capacity and a manageable capital improvement plan
The new Fitch Rating of ‘A’ reflects the airport’s predominantly origin and destination (O&D) air traffic base of about two million enplanements within a competitive air trade market. Under Fitch’s rating case, the airport’s low leverage is sustainable given the amortization of outstanding debt and expectations that upcoming capital needs will not result in a higher debt position. Fitch expects the airport will continue to maintain a competitive cost per enplanement (CPE) and a declining leverage profile supported by its robust liquidity levels.
Fitch Ratings considers Rhode Island T. F. Green International Airport’s market share to be well-diversified, with Southwest Airlines consistently holding the largest share of enplanements, as well as several growth catalysts underway with recently expanded services from Breeze Airways and other carriers.
The credit rating agency also found that RIAC’s key facilities are well maintained, with a well-defined and well-funded capital improvement program focused on terminal improvements, runway and taxiway rehabilitation, and the development of a south cargo ramp. Fitch also determined that annual debt service payments on outstanding bonds are profiled on a declining path within the next several years, that the airport’s financial profile is solid, with strong liquidity and unrestricted reserves, and that it has a low debt position.
